Thoughts on Oregon solutions to global problems

March 09, 2017

"Dealing wuth China"

Books: I listened to the audiobook “Dealing with China: An Insider Unmasks the New Economic Superpower” by Henry M. Paulson, Jr. From Goodreads (here):

DEALING WITH CHINA takes the reader behind closed doors to witness the creation and evolution of China's state-controlled capitalism.

Written in the same anecdote-rich, page-turning style as Paulson's bestselling memoir, On the Brink , DEALING WITH CHINA is certain to become the classic and definitive examination of engaging an economic superpower.

Hank Paulson has dealt with China unlike any other foreigner. As head of Goldman Sachs, Paulson had a pivotal role in opening up China to private enterprise. Then, as Treasury secretary, he created the Strategic Economic Dialogue with what is now the world's second-largest economy. While negotiating with China on economic reforms, he safeguarded the teetering U.S. financial system. Paulson has worked with scores of top Chinese leaders, including Xi Jinping, China's most powerful man in decades. Now, in DEALING WITH CHINA, he takes readers behind closed doors to witness the future of China's state-controlled capitalism.

What do you believe Xi Jinping will be looking to achieve in his talks with President Obama in Washington in September?

A.Xi Jinping is facing enormous challenges at home, and he has made it clear that he wants to have a good relationship with the United States. The recent U.S.-China climate change agreement not only shows how serious China is about dealing with carbon emissions, it also signals that China is willing to work with the United States on solving global problems. Among other things, I believe President Xi will be looking for progress on a bilateral investment treaty, which will both help open Chinese markets further to U.S. businesses and force China’s economy to reform. Just as China’s entry into the World Trade Organization in 2001 helped Premier Zhu Rongji push economic reforms, a bilateral investment treaty would help Xi fight vested interests who are opposed to his reform agenda.

I will say to anyone who is rooting for China to fail, they should be careful what they wish for. Why? Because China has been a significant contributor to global economic growth, which has benefited all of us. Economic failure in China could be extremely damaging for the global economy and could lead to political instability that would further rock the markets.